Keep regulations from blocking innovation

Fortunately, it didn’t take the Georgia Supreme Court as long as it took the General Assembly in deciding to cut the government red tape that was blocking the innovative ride-sharing business.

The legislature dithered over how to open the door to companies like Lyft and Uber. There were countless hearings, dozens of lobbyists on both sides of the issue, and untold hand-wringing moments the two years before the lawmakers passed a bill in 2015. Wisely, Gov. Nathan Deal signed it into law.

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The gist of it was to prohibit cities and counties from enacting new ordinances that would keep out ride-sharing companies. For Atlanta, that meant that the taxicabs that have city-issued medallions would no longer be protected from competition. While that city had not issued all of the 1,600 medallions it was limited to, it still had said no one could operate a “vehicle for hire” without one.

Atlanta council members were trying to be pro-business 20 years ago when they enacted their medallion rules. As a convention city, it is bad for business when tourists seek a taxi and find it dirty, unsafe and operated by a driver intent on fleecing customers. Requiring medallions empowered the city to inspect cabs and to withdraw the medallions of those that were substandard.

What changed is technology. Companies like Lyft and Uber now have the means to impose their own customer-service standards and better ways of getting substandard drivers and vehicles off the roads. That’s one reason customers are flocking to them.

A group of Atlanta taxi drivers sued to stop the law, arguing that it took away some of their livelihoods by eliminating their oligopoly. Justice Carol Hunstein in the court’s decision quoted a 130-year-old ruling from her predecessors that said essentially, “lump it.”

“Rarely, perhaps, does any new law which acts with vigor upon commerce, local or general, fail to impair the value of more or less property,” the court decided in an 1887 suit out of Atlanta.

No one should be guaranteed a safeguard from the competition that new technology can bring. Successful companies react by boosting their own customer service. Fortunately, all three branches of Georgia’s government have now affirmed that and held open the door for new innovation to benefit consumers.

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